Bitcoin may be at the beginning of a “massive transformation” in the mainstream of finance, said a major Citi report, and may even be the currency of world trade.
However, Citi analysts said bitcoin is at a “turning point” and may also suffer a “speculative implosion. “They said innovations in cryptocurrency systems would be needed to inspire wider adoption, and said greater regulation could eliminate some of the top avant-garde players.
In a deep 108-page dive on cryptocurrencies, Citi said there was a primary bitcoin shift from a “mainly retail-focused effort to anything that’s exciting for institutional investors,” as they seek higher yields and choice assets.
“In this scenario, bitcoin can be optimally located in the desired currency for global trading,” said a team of Citi analysts led by Sandy Kaul, Citi’s global head of business advisory services.
“It is immune from fiscal and financial policy, avoids the need for cross-border currency (FX) transactions, allows near-instant invoices, and eliminates considerations of defaults or cancellations, as currencies must be in the payer’s wallet before the transaction is completed. “
The report highlighted the increased acceptance of cryptocurrencies through corporations such as PayPal, Mastercard and Tesla, and said bitcoin shortages mean investors are comparing it to “digital gold. “
These advances have helped increase the value of bitcoin by more than 400% over the previous year, fell more than 20% last week and the value of bitcoin (BTC) was about $47,800 on Monday.
The bank’s report also said that greater acceptance of bitcoin would lead to greater regulation, which could alienating some of the best avant-garde players.
“Many of the most talented and cutting-edge developers can choose to exit established platforms by implementing more extensive tracking and tracking. This can end up dividing liquidity into the system. “
Citi said Bitcoin’s long term is “unkistakable,” but added, “Short-term progress is likely to be decisive, as the currency is balanced at the turning point of widespread acceptance or speculative implosion. “